“It’s time that Australian business started talking about the glass being half full," Mirvac chief executive
Nick Collishaw
said.

“Because it isn’t that bad."

Just days from the end of 2011-12, Mirvac expects to meet its residential sales target for the financial year, Mr Collishaw said.

In the national market, sales in medium density residential units are growing at double the rate of those for detached dwellings.

“For a business like ours, there is a strong focus on infill sites. There is opportunity to prosper."

It’s a common sentiment from those at the top of Australia’s most powerful property companies.

Charter Hall’s joint managing director,
David Harrison
, also cautioned against being “overly negative. You just need to look at the amount of capital that is looking to invest in Australian real estate to ask the question: is the market as bleak as some of the media commentary suggests?

Related Quotes

Company Profile

“The market is looking at the widest, or largest, positive spread to debt and bond yields we’ve seen in probably 15 years."

Among the property leaders, there is acknowledgment of the economic climate and the contagious effect of the European crisis on sentiment.

And there is worry at the unsteady leadership in Canberra, and a particular concern over the extra cost in landlords’ power bills as the carbon tax takes hold from July 1.

But there is also a solid reservoir of optimism. GPT Group chief executive
Michael Cameron
said he was comforted by the underlying good health of the economy, though in the short term there were no “obvious catalysts for change in the current conditions".

“If we were to see a resolution of the European crisis, and some stability returns to the federal government, that would provide a good lift in confidence and get people to start spending again."

Mr Cameron said GPT’s high-quality assets – which are close to fully occupied and many of which have fixed rental increases built in – will achieve their targets.

The listed landowners said they are favouring core office markets: in Sydney especially, where supply is short, and in Brisbane and Perth, where the miners and service firms are eating up the vacancies.

In the premium grade market, the forecast is for moderate rental growth, falling incentives, capitalisation rate compression and a growth in capital values.

But the economic situation also meant that landlords must worker harder, said DEXUS Property Group chief executive Darren Steinberg.

Leasing will remain subdued, in line with the economic cycle. “Owners will need to work closely with tenants and proactively manage expiries to maintain occupancy and income. It will be the level of management that will differentiate over the course of the next 12 to 24 months," he said.

The retail sector has played the role of the coalminer’s canary for the Australian economy.

But Centro Retail Australia’s
Steven Sewell
said shopping centres that are anchored by the big supermarket chains were still performing strongly, especially at the neighbourhood and sub-regional level.

“We think this sector will outperform. The vacancies are holding firm, rental rate growth is still solid."

The carbon tax impost on energy bills will eat into tenants’ occupancy costs. And on their side, landlords can only pass on a proportion of that extra cost to their tenants.

The other big challenge for all retailers was the changing demand created by online shopping, he said.

“It’s not just a case of offering four walls and a roof any more. You’ve got to offer display areas, pick-up facilities. You’ve got to be a bit more lateral-thinking in how you lay and position your shopping centres," Mr Sewell said.

Among the most bullish of the property dons is Greg Goodman, whose Goodman Group has just unveiled its plan for a $1.5 billion fund for US-based logistics facilities.

Mr Goodman said prime investment grade property around the world is in high demand and short supply, whether office, retail or industrial.

“The world is not in a great place, we all accept that," he said. “But everywhere in the world we are adapting.

“In Australia, as in the UK, we are being opportunistic and entrepreneurial, securing alternative uses for the land.

“Because we have the ability to fund, we can make money in a world that is far less competitive than we have ever seen it," Mr Goodman said.